Positively Charged

What role does the US play in Ecuador’s foreign policy agenda?

First of all, Ecuador is interested in promoting a positive and constructive relationship with all countries around the word. The US is a key Ecuadorean partner in many issues. The first issue is human mobility. Many Ecuadoreans decided to emigrate to the US after the Ecuadorean financial crisis of 1998 and 1999, looking for jobs and opportunities. The first wave of immigrants attracted other Ecuadoreans, and now there are about 1.5 million Ecuadoreans living in the US. This has led to a real economic, cultural, and social integration between Ecuadoreans and the US communities that have welcomed them. In this group of immigrants, we also see vulnerable groups that deserve our special attention. Therefore, immigration, reform, family reunification, and the protection of migrants’ rights are important aspects of the bilateral agenda with the US. Ecuadorean immigrant remittances used to be 8% of GDP and were a strong boost to the Ecuadorean economy, a factor that has changed since President Correa took office. Because of the international crisis, this figure declined to 4%. This is due to the strengthening of the Ecuadorean economy, whose revenues have diversified and multiplied by improved efficiency in oil production and tax collection, and because the private sector’s contribution has grown, fostered by public policies implemented by the Ecuadorean government. In addition, there are many US citizens who have chosen Ecuadorean cities as their retirement destinations, attracted by benefits the Ecuadorean government has put in place for seniors. Many students travel to Ecuador as part of university exchange programs, and many US companies also operate in Ecuador. This situation has generated strong ties that unite the people of both countries.

What are the terms for a future trade agreement between Ecuador and the US?

Bilateral trade is the second most important element in the relationship. The US remains Ecuador’s largest trading partner. Growing this market is a central issue in our bilateral agenda. The US market, with over 300 million consumers, has great potential to absorb Ecuadorean export diversification and support government programs to incorporate new, productive sectors—especially those designed to include the vulnerable economic groups and generate better employment opportunities, investment, and development. One important element is to strengthen cooperation with academic institutions and the US private sector in order to attract research and investment programs that seek to foster change in our production matrix and leap technologically to add value to our production and services. I think we can develop important strategic alliances. Ecuador exports to the US market through a most favored nation (MFN) understanding, covering 77% of total non-oil exports, the Andean Trade Promotion and Drug Eradication Act (ATPDEA), a unilateral tariff preferences program covering 22% of non-oil exports, and the Generalized System of Preferences (GSP), another unilateral tariff program that covers the remaining 1%. ATPDEA has been extended until July 2013. In the short term, my job is to find an alternative trade mechanism or agreement for the products covered by ATPDEA. It should be noted that many items contained in ATPDEA are also covered by the GSP. In the medium term, Ecuador has expressed its interest in signing trade agreements for development with its major trading partners, which take into consideration the asymmetry of development, allow us to implement our industrial policies, and consider the vulnerability of certain economic sectors that may be affected by an immediate liberalization of commerce. The Ecuadorean government believes that a strong economic inclusion policy should accompany the process of trade liberalization.

What is the potential for the further development of technology transfer from the US?

Ecuador has great potential in several sectors such as software, biotechnology, tourism, oil, mining, and logistics, among others. Besides being competitive, we have recently implemented several fiscal incentives to attract foreign investment and technology transfer to these sectors. Also, the government has invested very important resources in modernizing our infrastructure and human resource training and has also invested in science and technology. The government has invested in major infrastructure projects to further integrate the country with a modern network of highways, airports, ports, and bridges, as well as hydroelectric plants. We have also implemented policies to enhance the quality of education from elementary until post-graduate programs, and implemented programs to attract researchers to our universities. Regarding fiscal incentives, new investment in key sectors will take advantage of a tax holiday haven for the first five years. We are also implementing new economic development zones with an emphasis on technology transfer, exports, and industrialized products and logistics. These zones have additional fiscal incentives for up to 25 years.